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LECTURE XIII
FORESTRY ECONOMICS AND
MANAGEMENT
Introduction

If forestry is to contribute its full share to a
more abundant life for the world’s increasing
populations, foresters must become familiar
with the economic and political forces that
determine much of our way of life.
 Forests are economic resources because
they can be used to produce goods and
services that people want to consume.
Introduction

A forest can be used in more than one way
hence the need for choices to be made
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Timber may be harvested and alternatively used
for making paper or fuel.
It might be kept standing to support recreation or
aesthetic values
It might be saved for industrial use for future
generations.
Thus a forest can generate two or more kinds
of benefit simultaneously or sequentially e.g.
industrial timber, recreation, livestock forage.
Introduction

Forests are used in combination with some
labour and other inputs, to help produce
consumer products e.g.housing, paper and
outdoor recreation.

This makes them valuable economic resources.
 The
more value in final goods and
services that can be generated from a
tract of forest, the more valuable the
forest itself.
Forestry Economics

Forest economics deals with those economic
problems involved in owning, buying, selling
taxing and managing forest land, whether it is
used for producing water, wildlife, wood or
other products
 It is also concerned with:
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The economic problems of growing, protecting,
harvesting and marketing the products of that land
Examining the interplay of forces that determine
the product or group of products a particular forest
should produce.
Forestry Economics
 The
justification of forest economics as
a specialization distinct from the general
field of economics lies primarily in the
detailed knowledge that the peculiarities
of forestry require the general
economist to acquire.
 The approach to and use of economic
concepts and principles in forestry must
always be tempered by the biological
nature of the resource itself and by the
time span involved.
Forestry Economics Perspectives

Choices to be made include:
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How a forest will be managed
What goods and services will be produced
How much will be invested in enhancing growth.
Decision-making in forestry as in all
businesses, involves making a choice from
possible alternative actions.
 Forestry economics deals with choices on
how forests are managed and used as well
as how factors of production (labour and
capital) are used in forest production.
Role of Forestry in the Economy
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The aim of forest development is to intervene
vigorously in the forest sector in an appropriate
manner in order to maximize its contribution to the
common goals of comprehensive development
planning in Kenya.
These goals include:
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Employment creation.
Improved management of human and financial resources.
Regional balance.
Expansion of agricultural and industrial production.
Conservation and management of natural resources.
Improved public welfare.
Role of Forestry in the Economy
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The contribution of the forest sector to the common
goals of national development is to satisfy the
demand for forest products and environmental
benefits in the local, national and international
economies.
The contribution is made up of use and non-use
values.
The use values include:
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The net value of income that is earned from the consumption
of wood products and ecotourism.
The value of soil and water conservation by the forests to the
agricultural productivity and of the sequestration of carbon in
mitigating global climate change.
Role of Forestry in the Economy

The option value of forest biodiversity that
provides opportunities to utilize the growing
stock at some stage in the future e.g. in the
production of medicine and improvement of
agricultural productivity.
 The non-use values are the value to society
of its satisfaction that forests are an inherent
part of the environment, and the bequest
value that the community collectively places
upon its desire to preserve the inherent
characteristics of the forests for the future
generations.
Forest Policy

The purpose of any Forest Policy is to guide
the sustainable management of the forest
resources
 The Policy defines forests ecosystems
including their plant and animal biodiversity
and ecological processes and functions.
 It covers natural as well as plantation forests
and includes forested land that has been
deforested or degraded.
Forest Policy
 It
addresses forests located on both
public and private lands, and therefore
encompasses State Lands, protected
areas, Forest Reserves and lands that
are in private ownership.
 Such a policy should address forests on
both public and private lands
Forest Management
Objectives
 Until
recently, foresters were often
concerned in managing forests for the
sustained yield of only timber or woody
products.
 Sustainable management of forests was
based on the principle of harvesting the
wood at an average annual rate that is
no greater than that at which the forest
in question can grow.
Forest Management
Objectives
 It
is now realized that if sustainable
forest management is concerned with
the production of wood alone, then the
other goods and services that can be
obtained as well as the wider social
issues that may be involved are
neglected.
 Management for sustainable wood
production did in fact frequently meet
these wider needs in the short term but
this was coincidental.
Forest Management
Objectives
 Since
such practices were not included
in the stated objectives, management
was not done in a sustainable manner.
 Wood production was sometimes in
conflict with these wider functions of the
forest, particularly where it competed
with the needs of those whose
traditional livelihood depended on the
forest.